Correlation Between Hana Materials and Semyung Electric
Can any of the company-specific risk be diversified away by investing in both Hana Materials and Semyung Electric at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hana Materials and Semyung Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Materials and Semyung Electric Machinery, you can compare the effects of market volatilities on Hana Materials and Semyung Electric and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hana Materials with a short position of Semyung Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Materials and Semyung Electric.
Diversification Opportunities for Hana Materials and Semyung Electric
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hana and Semyung is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and Semyung Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semyung Electric Mac and Hana Materials is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hana Materials are associated (or correlated) with Semyung Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semyung Electric Mac has no effect on the direction of Hana Materials i.e., Hana Materials and Semyung Electric go up and down completely randomly.
Pair Corralation between Hana Materials and Semyung Electric
Assuming the 90 days trading horizon Hana Materials is expected to under-perform the Semyung Electric. But the stock apears to be less risky and, when comparing its historical volatility, Hana Materials is 1.39 times less risky than Semyung Electric. The stock trades about -0.52 of its potential returns per unit of risk. The Semyung Electric Machinery is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 540,000 in Semyung Electric Machinery on September 5, 2024 and sell it today you would lose (82,000) from holding Semyung Electric Machinery or give up 15.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Materials vs. Semyung Electric Machinery
Performance |
| Timeline |
| Hana Materials |
| Semyung Electric Mac |
Hana Materials and Semyung Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Materials and Semyung Electric
The main advantage of trading using opposite Hana Materials and Semyung Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Materials position performs unexpectedly, Semyung Electric can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Semyung Electric will offset losses from the drop in Semyung Electric's long position.| Hana Materials vs. NH Investment Securities | Hana Materials vs. Hanwha InvestmentSecurities Co | Hana Materials vs. Daelim Trading Co | Hana Materials vs. RF Materials Co |
| Semyung Electric vs. PLAYWITH | Semyung Electric vs. Hyundai Engineering Plastics | Semyung Electric vs. Hana Materials | Semyung Electric vs. Lake Materials Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |